What if, based on a few parameters, there was a streamlined way to secure more federal contracts? Turns out, there is such a way! A component of the Federal Acquisition Regulations, simplified acquisition is a contracting method that seeks to reduce the friction between government contractors and contracting officers as well as provide small businesses with another avenue to secure federal contracts. Under simplified acquisition, contracting officers don’t go through the typical evaluation process of comparing plans, budgets, and establishing a competitive range. So this begs the question – what are the simplified acquisition parameters?
What Is the Simplified Acquisition Threshold
The Simplified Acquisition Threshold (SAT) is the dollar amount in federal acquisition represented by the anticipated award amount of a contract, under which contracting officers are directed to use simplified acquisition procedures to solicit and award the resulting contracts. As of summer 2022, the SAT is $250,000.
In addition to the dollar amount threshold, when simplified acquisition procedures (SAP) are in effect, the resulting contract work is reserved exclusively for small businesses and is set aside for socioeconomically disadvantaged businesses. Businesses that are eligible for set-aside contracts have a phenomenal opportunity to grow their business. SATs are cheaper to bid on and are likely to result in awarded contract work much quicker than typical contract negotiations.
What Are Simplified Acquisition Procedures Buying Methods?
If the SAT isn’t surpassed, SAP buying methods will be put into action. Here are the three methods that federal contracting officers will utilize:
Government-Wide Purchase Card (Micro Purchases)
The government has purchase cards that, in accordance with FAR 1.603-3, are eligible to be used to acquire contract work that is beneath the micro-purchase threshold (MPT). The micro-purchase threshold is a sliding scale. Detailed by FAR 2.101, the MPT is $10,000 for general contracting, $20,000 for contingency operations, defense, or recovery within the U.S, and $30,000 for those same operations outside the U.S.
A Purchase Order (PO) is a commercial document issued by a buyer to a seller that dictates what quantities and prices the buyer will pay. A PO offered by a federal contracting officer is a legally binding offer to purchase goods or services from a potential federal contractor.
Blanket Purchase Agreements
A Blanket Purchase Agreement (BPA) is a simplified method of filling anticipated repetitive needs for supplies or services by establishing “charge accounts” with qualified contractors.
How to Benefit from the Simplified Acquisition Threshold
Now that we have established how simplified acquisitions are implemented and how useful they actually are, let’s look at how you can put the SAT and SAP to work for your business. Large deals are great but small dollars add up fast and can sustain your business while you search for more sizable opportunities. If you do have an opportunity to shape a future contract, consider limiting the scope to keep it under the SAT. Federal agencies set aside 23% of contracting dollars for small businesses, and they are very motivated to meet these spending goals.
To maximize the chances your business is selected under SAPs make sure your value proposition is appropriately differentiated and a compelling reason exists for the sole source set aside. Having a firm understanding of the regulations will help you and your government customer make the contracting officer’s job easier by suggesting a business case for a sole-source award that is consistent with the FAR. Feel free to visit our FAR blog for more information.
Many new entrants to government contracting tend to be sole proprietors. Their brand is their business, and they may have specific expertise gained during a career in government service or working in an industrial sector. If you have a specific skill set the government needs, there’s a chance you can find an agent who is looking for your services. But only if you know the right places to look. For instance, the product service code R499 for Other Professional Services is used by agencies to solicit specific professional services. A query for such a PSC code can return multiple opportunities. While not all of them will be under the SAT, finding a few of these will provide you with some low-effort opportunities to add to the top of your business pipeline.
Get Expert Consultation on Leveraging SAT
FAMR is dedicated to assisting businesses in navigating the Federal marketplace. Our team of federal government contracting experts will advise how to best leverage SAT opportunities as a buyer. They will guide you through the process every step of the way and ensure you’re optimizing your federal government contracting opportunities.